Global Knowledge Transfer and Telecommunications: The Bell System in Japan, 1945–1952

This study evaluates the Bell System's role in the revival of Japanese telecommunications during the post-World War II occupation. Civilian and military personnel who had worked for the firm and who served in the Civil Communications Service (CCS) of the Supreme Command Allied Powers represented the primary agents for knowledge transfer to Japan's Ministry of Communications (MOC) and its supporting independent equipment manufacturers. The MOC became a channel for communicating ideas about management practices at the Bell System to the local telecommunications industry. The CCS's actions in Japan represent what Alfred D. Chandler has termed the "integrated learning base" in action in the public sector. The CCS's role in knowledge transfer has been underestimated by many scholars who have focused primarily on its contributions to promoting production and quality engineering in telecommunications manufacturing. Its central achievement was laying the managerial groundwork for the establishment in 1952 of the governmental enterprise Nippon Telegraph and Telephone.

The Japanese telecommunications infrastructure was a major casualty of World War II. Wartime air raids destroyed about half of Japan's 1.6 million telephones and half of its telecommunication equipment factories.¹ American engineers estimated the country would need at least three million telephones to support the postwar economy.² If Japan were to successfully rebuild its economic system and establish a new political regime, a reliable telecommunication system was a must. This came to pass, in no small part, because of a process of global knowledge transfer involving representatives of an American firm that provided a broad range of managerial and technical capabilities.

This article demonstrates the role of individuals from the Bell System in restructuring the telecommunication system through their service in the occupation government's Civil Communications Section (CCS). The Bell System was well suited for this mission because of its close relationship with the US government and its earlier contributions to Japanese telecommunications. The Bell System was the largest telephone system in the world, and ranked among the most technologically advanced networks.³ Its CCS representatives provided state-of-the-art technology, systems, and managerial ideas. The modernization of telecommunications benefited from the bootstrapping of new business institutions during the occupation, built up from decades of learning overseas. The absorption of the practices that the CCS disseminated reduced the time and costs necessary for Japan to build the foundations for global competitiveness. As Japan began to advance into the ranks of the technological elite, the visitors departed and the hosts embraced their independence. In this respect, the CCS experience fit a long-standing pattern of Japanese techno-nationalism.⁴

During the occupation, and particularly in the years 1947–1950, Bell System associates shaped the transformation of Japanese telecommunications in three ways. First, they extended functional knowledge relating to traffic, maintenance, manufacturing, marketing and other activities necessary to support an emergent consumer market for communication services. Second, they helped raise technical capacities that improved operating efficiency and encouraged engineering standardization and education to surmount chronic problems of high-cost and low-quality equipment production. Third, they facilitated building managerial capacities for coordinating functions,monitoring performance, establishing strategies and allocating resources. Overall, the Bell System's role in the CCS stands as a revealing case study in organizational learning involving global transfer of managerial knowledge.

An extensive literature exists on American activities in postwar Japan. Moses Abramovitz and Paul A. David argue that the process of catch-up and convergence with US standards was contingent on Japan's natural resource endowments, prevailing technological commitments and social capabilities for accommodating change.⁵ Richard Pascale and Anthony Athos focus on social capabilities by distinguishing between two types of knowledge in comparing Japanese and American management. Their three hard S's of management—strategy, structure and system—seemed readily transferable, while their four soft S's—skill, style, shared values and staffing—seemed less so because of the pull of embedded social and cultural values.⁶ William M. Tsutsui, focuses on the progress of Taylorism in Japan, showing how socioeconomic change after 1911 shaped...